Government must act to help 'fuel poor' with energy bills

29 August 2008 / by Rachael Stiles
A new package to help households which are facing fuel poverty is expected to be announced by the government in the next week.

Millions of people are currently thought to be in fuel poverty – whereby more than 10 per cent of their income is spent on energy for their homes – and consumer action groups have been calling on the government to take action and help those in need.

With the recent hikes in energy prices, the average dual fuel bill now stands between £1,210 and £1,328, so the government is under pressure to implement measures that will help people afford to heat their homes this winter.

Some groups are calling for a windfall tax on the energy companies which have been profiting from the recent hikes in gas and electricity prices, but this has been criticised because the companies would just pass the cost on to the consumer.

Other proposals include child credits to compensate for the rise in energy prices as well as the general cost of living with soaring petrol and food costs, or direct help with paying the bills.

In an interview with the Telegraph, John Hutton, the Business Secretary, admitted that "There is genuine concern about the difficulties that people will face paying their heating bills over the coming winter", but tried to calm people's fears by saying that they government is "looking at extra support."

He opposes the idea of a windfall tax on the energy companies, which, as Cabinet minister in charge of energy, means it has effectively been ruled out. He says such a tax would only exacerbate the situation for consumers, but denies that energy companies have been ripping off their customers who have benefitted "very considerably" from the days of cheap energy which are now over.

Seventy Labour MPs have signed a petition to levy a tax on the "excessive profits" of the energy companies, and consumers will be disappointed that they are not offered this help, but, arguably, any help they received would go straight into the pockets of the energy companies when they passed on this cost to their customers.

He pointed to green energy and nuclear power as a means of keeping up with the UK's energy needs, especially as relations with Russia – one of the UK's primary gas providers – over the Georgia controversy has put its future importation of energy in jeopardy.

"The era of cheap energy is over." Mr Hutton said. "The question is how are we going to adjust to that and what sort of help can we provide to those who are going to struggle the most."

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